Comer v. Murphy Oil leaves future climate change litigation uncertain

The 5th Circuit’s October 2009 panel decision in Comer v. Murphy Oil marked the first time a federal appeals court allowed private plaintiffs to go forward with climate change tort claims. And when the en banc 5th Circuit agreed to rehear the appeal, the case looked likely to bring legal certainty to the climate change litigation realm. Either it would add to the growing pressure against oil and gas companies to cut emissions, or it would lead to a circuit split with the 2nd Circuit, which had allowed state and public plaintiffs to proceed with similar claims in Connecticut v. AEP, and nudge the issue closer to the Supreme Court.

Instead, an unprecedented procedural oddity has effectively dismissed the case, leaving a question mark in its place.

“It’s a very strange potential ending to this case, and it’s all the stranger because it’s such a closely watched case,” says Trent Taylor, a partner at McGuire Woods. “It was one of three climate change lawsuits that all of corporate America was watching very closely—if it was allowed to go forward it would open up the oil, coal and energy industries to mass liabilities.”

Coastal Mississippi property owners alleged in Comer that the greenhouse gas emissions of more than 100 named defendants in the oil and coal industries contributed to the intensity of Hurricane Katrina’s effects, which caused damage and destruction to the plaintiffs’ property. They sought damages under Mississippi common law, including public and private nuisance, trespass and negligence claims. A federal district court in Mississippi dismissed the claims on the grounds that they presented a non-justiciable political question and that the plaintiffs lacked standing, but the 5th Circuit panel reversed and let the claims proceed.

The en banc 5th Circuit only consisted of a bare quorum of nine of the active 5th Circuit judges—seven had recused themselves from the case. That was no surprise considering the breadth of the list of the defendants, which read like a directory of the oil and coal industries. The remaining judges had agreed 6-3 to rehear the case en banc, an action that automatically vacated the panel opinion.

Three months later came a shock when the court revealed that another judge had recused herself.

“After the en banc court was properly constituted, new circumstances arose that caused the disqualification and recusal of one of the nine judges,” the court wrote. “Upon this recusal, the en banc court lost its quorum.”

Without a quorum, the 5th Circuit could not rehear the case en banc—but it also had no authority to reinstate the vacated panel decision. The court voted 5-3 to dismiss the appeal, letting the district court’s dismissal stand—and delaying any certainty on climate change torts.

Shock and Law

The first reaction from observers seemed to be unmitigated amazement. “I’d be shocked if we ever saw this particular set of circumstances again in the history of the U.S. judiciary,” says Seth Jaffe, coordinator of the Environmental Practice Group at Foley Hoag. “It’s just unbelievable how this came about.”

The unusually high number of recusals was largely a result of the number of defendants named in Comer. From the outset, that made it much more likely that a judge hearing the case would have a financial interest in one of the energy companies or would have a spouse or family member who worked for them or represented them in the past.

“It’s bizarro world. Usually when you’re talking about recusals it’s the judge who didn’t recuse himself—think of Caperton v. Massey last year,” says Taylor, citing the case in which it emerged that the West Virginia Supreme Court’s chief judge took campaign contributions from a party arguing before him. “Now we have a situation where there are too many—it’s a strange transition that has come up more than you might think, including in the Supreme Court. We’re seeing more and more litigation and not only just against the BPs and Exxons of the world—that’s happened for years. Now you see 30, 50, 100 different corporate defendants sued. There’s been a push under the radar in recent years to find better ways to deal with recusals issues.” (See “Considering Conflicts.”)

The second unusual circumstance arising in Comer was the delayed recusal, which turned out to come from Judge Jennifer Elwood for as-yet unknown reasons. Usually courts, especially in the federal system, have automated systems in place to determine when judges must recuse themselves—under the current rules they must do so if they own as little as one share in any given company that is a party in a case. Judges declare holdings, and any associations with parties to litigation are automatically flagged. No insight has emerged as to why Elwood’s need to recuse herself may have gone undetected.

“What was surprising was that they did not reinstate the panel decision,” Taylor says. “There’s a local rule in some courts that if a case is granted en banc review, the panel decision is vacated like it never happened—obviously that’s done with the understanding that the full court decision will replace it. The 5th Circuit says they didn’t have the power to reinstate it because they no longer had a quorum.”

Rare Glimpse

The order outlined a few other options the court had explored and deemed incorrect, such as waiting for the court’s composition to change and allowing disqualified judges to hear the appeal. The three dissenting judges—the original panel reversing the district court’s dismissal—disagreed with the outcome.“

The dissenting judges felt quite strongly that the other five judges should have joined them in reinstating the panel opinion, but I don’t think that the better view of what power the court had in the absence of a quorum would support that,” says John Parker Sweeney, a member of the climate change team at Womble Carlyle Sandridge & Rice. “I honestly don’t know what else the majority of the remaining judges could do in the absence of a quorum other than to say, we can’t conduct any business here and we have to dismiss the appeal.”

Sweeney notes that it may be that such issues arise in appeals courts and prevent rehearings from being granted in the first place, but no one hears about them because courts don’t issue opinions in such matters and there are few requirements for disclosing judicial recusals and the reasons behind them.

“I can’t recall another case that illuminated the inability of a court to proceed because of conflicts,” Sweeney says. “One of the most unusual things about the Comer order is that because opinions were written, we have an unusual amount of insight into the internal court process in this situation, which is highly unusual.”

Hazy Future

The upshot of all this is that the future of climate change torts remains unclear. “From an inside baseball perspective, this is a very interesting procedural situation,” says Peter Glaser, a partner at Troutman Sander. “But what’s important here is what the law ultimately proves to be.”

Comer is somewhat unceremoniously finished unless the Supreme Court takes the case, which the plaintiffs are likely to appeal. The energy companies named in Comer are off the hook for now, but the outcome—a procedural district court decision with no precedential weight—is too inconclusive to call a victory.

“The [energy companies] wanted this case heard en banc because it’s almost certain it would have come out in their favor,” says Taylor, who notes the 5th Circuit is known as one of the nation’s most conservative. “Another consideration is that the defendants in Comer were hoping they could get a result from the 5th Circuit that would constitute a split of authority from the 2nd Circuit, making it more likely that the Supreme Court would grant review—they wanted Comer to be the case to resolve, once and for all, this climate change litigation.”

It seems inevitable that the question of climate change actions will ultimately be answered by the Supreme Court. “Whether future cases are filed will depend very much on whether the Supreme Court grants cert in this trio of cases”—Comer, Connecticut v. AEP and Native Village of Kivalina v. ExxonMobil Corp., a climate change case the 9th Circuit will hear this fall, says Glaser.

Even if the Supreme Court grants cert in Comer, it would only delay a ruling on the merits of climate change torts.

“If the Supreme Court takes it, they’re reviewing the court of appeals’ decision to dismiss the appeal for lack of a quorum,” Jaffe says. “Even if it goes back, is decided, and then is presented to the Supreme Court with a circuit split, that will take a few years. It’s going to be a long time before the Supreme Court looks at whether you can bring a nuisance claim for climate change.”